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Crude Oil Price: Rebound Loses Steam Below 55.00

Crude oil turned sharply lower after finding resistance below the $55/barrel figure, snapping a five-day winning streak that brought prices to the highest level in over a month. As we noted previously, the upswing from Augusts’ lows appeared to be corrective, owing to short-covering more so than new buying interest. The last leg of the advance appeared particularly suspect, following on the heels of a knee-jerk reaction to a seemingly innocuous refrain in OPEC’s monthly bulletin.

Near-term support now looks to be at 47.82, the 23.6% Fibonacci expansion. A break below this barrier on a daily closing basis opens the door for a test of the next downside threshold at 43.82, the 38.2% level. Resistance comes in at 50.29, marked by the 14.6% Fib, with a move back above that clearing the way for another test of the August 31 swing high at 54.29.

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